Telecoms split on IP peering fees

LEVELING THE FIELD?Chunghwa Telecom runs the links to international ISPs and charges a fee to other telecoms for access. Rival firms want the fee dropped

By Shelley Shan / Staff reporter

The National Communications Commission’s (NCC) proposal to eliminate the Internet protocol (IP) peering fees for telecom carriers drew mixed reactions at a hearing on Thursday, with Chunghwa Telecom saying the policy went against global trends and other carriers calling for more government intervention.

At present, Chunghwa Telecom controls the infrastructure for connections to international Internet service providers (ISPs). Other ISPs in Taiwan have to pay a peering fee to the company to be connected to international ISPs, and Chunghwa has exclusive rights to set the fee.

The commission has proposed that Chunghwa waive the peering fee and let other ISPs use the infrastructure for free in order to boost competition in the telecom market.

Far Eastern Telecommunication said that the number of the mobile communication service users is now 2.6 times more than fixed network communication users.

With the government getting ready to issue licenses for fourth-generation (4G) mobile communication services, the biased situation created by the peering charge would be exacerbated, a Far Eastern representative said.

“The problem with peering is that we have to pay Chunghwa Telecom. There is no alternative,” the representative said.

“We support government intervention when the market is out of order,” the representative said.

Taiwan Fixed Network said it supports the government regulating the peering pricing mechanism through the legislation.

While governments in other countries do not intervene in the setting of peering charges among telecom carriers, the Taiwan Fixed Network representative said that the intervention was needed in the local market because the difference in Chunghwa’s market share and the others is huge.

However, Vibo Telecom said the pricing scheme for peering charges should be clearly stated in the commission’s proposed legislation.

Its representative said such legislation should aim to ensure fair competition in the market and should not cater to the needs of specific telecoms or groups of consumers.

“The free peering service should be available to every carrier,” he said.

Chunghwa Telecom and its largest shareholder, the Ministry of Transportation and Communications, said that peering charges in most countries are set through negotiations between companies.

A Chunghwa representative said the firm was willing to consider lowering the fee.

“Offering free peering would actually hurt ISPs in Taiwan, because it weakens our bargaining power with international ISPs,” he said. “They can set up local ISPs and gradually take away our corporate clients.”

Chunghwa officials said it was also unfair to ask the company to slow down so that other carriers can catch up with it.

One Chunghwa official disagreed with the description of Taiwan’s market as one that was out of order.

One telecom having a huge market share does not necessary mean that market competition is out of control, he said.

“Now we have Google, Facebook, YouTube — and they each have a huge market share in their respective markets. Do you hear anyone say that those are out of order markets?” the official said.

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